In Anglo Platinum Management Services v SARS,(1) the Supreme Court of Appeal (SCA) recently ruled in favour of the taxpayer in respect of a motor vehicle salary sacrifice scheme. The judgment underlines the importance of employers and employees properly agreeing, understanding and implementing any remuneration structures that contain a salary sacrifice component. Background A ‘salary sacrifice’ or ‘salary substitution’ arrangement is essentially the substitution of a cash component of an employee’s overall cost-to-company remuneration package for a non-cash benefit, generally resulting in a lower amount subject to the deduction of employees’ tax.
Category: Income Tax
The tax risks of cross-border employment
Author: Shohana Mohan (KPMG) The issues relating to the international hiring out of labour, personal tax considerations and what to look out for when structuring contractual arrangements. The world has become increasingly globalised, and cross-border mobilisation is high on the agenda for many countries and companies. Any multi-national company worth its salt has a global mobility policy framework in place, which sets out the parameters for cross-border employment.
Pravin Gordhan: We will win the trust of South Africans
Author: Sarah Evans (Mail & Guardian) In his first press conference since being reappointed finance minister, Gordhan has pledged to ensure “sound fiscal management”. The newly appointed minister of finance, Pravin Gordhan, sought to reassure the country and nervous investors on Monday in a press conference where he promised that “sound fiscal management” would be the ministry’s priority. Gordhan was appointed to the position, which he previously held from May 2009 to March 2014, in a surprise announcement on Sunday night.
SARS explains 2015 Tax Administration Amendments
Author: Lorys Charalambous (Tax-News.com) On December 17, the South African Revenue Service (SARS) issued an explanatory memorandum on the 2015 Tax Administration Laws Amendment Bill (TALAB). In particular, the memorandum looks at the TALAB provisions giving effect to the collection of information from South African financial institutions (FIs), and the associated obligation on the FIs to register with SARS regarding the Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the United States that was signed in July last year.
The Valuation of Assets by Taxpayers – Lessons from Stepney Investments
Author: Esther van Schalkwyk, Tax Consultant at BDO South Africa. The Supreme Court of Appeal (SCA) recently handed down judgment in CSARS v Stepney Investments (Pty) Ltd in which it confirmed that valuations are not to be taken lightly by taxpayers. Stepney disposed of a pre-valuation date asset of 4.37% of the shares it held in Emanzini Leisure Resorts (Pty) Ltd. Stepney elected to use the market value of the shares on the valuation date as the method of determining the value as at 1 October 2001.
Proposed extension of existing prescription periods (section 99 of the Tax Administration Act)
Author: Mareli Treurnicht (Cliffe Dekker Hofmeyr). Section 99 of the Tax Administration Act, No 28 of 2011 (TAA) prescribes the period of limitations (ie prescription) for the issuance of assessments. Section 99 currently states that the South African Revenue Service (SARS) may not make an assessment in terms of Chapter 8 of the TAA, inter alia: three years after the date of assessment of an original assessment by SARS; (in the case of self-assessment for which a return is required) five years after the date of assessment of an original assessment by way of self-assessment by the taxpayer or, if no return is received, by SARS; or (in the case of a self-assessment for which no return is required) after the expiration of five years from either the date of the last payment of the tax for the tax period or the effective date, if no payment was made in respect Read More …
SARS introduces electronic ‘suspension of payment’ applications
Taxpayers lodging a dispute with SARS can now electronically request that SARS suspend the payment of tax. However, please be aware that the suspension of payment should be requested at a branch if it is accompanying an objection or appeal. It must not be done via eFiling as eFiling only supports “suspension of payments” that do not accompany an objection or appeal. What if I don’t agree? What’s New? From 4 December 2015 for Income Tax, taxpayers will be able to electronically at a SARS branch and via eFiling:
Victory for taxpayer in motor vehicle salary sacrifice scheme
Author: Ruaan van Eeden (Cliffe Dekker Hofmeyr). In the recently reported case of Anglo Platinum Management Services v SARS [2015] ZASCA 180 (Anglo), the judgment of which was delivered on 30 November 2015, the Supreme Court of Appeal (SCA) ruled in favour of the taxpayer in respect of a motor vehicle salary sacrifice scheme. The judgment stresses the importance of employers and employees properly agreeing to, understanding and correctly implementing remuneration structures that contain a salary sacrifice component.
Proposed amendments to the rules of prescription – does this leave a taxpayer with any certainty?
Authors: Robert Gad and Taryn Solomon (ENSafrica). A fundamental reason for the existence of the rules of prescription in our tax law is to provide a taxpayer with certainty as regards its tax position. It is therefore important that such rules are clear and not subject to unfettered discretions. In disputes with the Commissioner for South African Revenue Service (“the Commissioner” or “SARS”), prescription is a powerful defence available to compliant taxpayers, allowing them to bring finality to their tax assessments.
Corrections of tax assessments – what is readily apparent to SARS?
Author: David Warneke Director and Head of Tax Technical at BDO South Africa. The latest version of the Tax Administration Laws Amendment Bill of 2015, which is likely to be promulgated in its current form, proposes that in future SARS will not be permitted to entertain so-called ‘requests for correction’ of tax assessments, except if SARS is satisfied that there is a (currently undefined) ‘readily apparent’ undisputed error in the assessment. In my view, it is likely that taxpayers will be severely prejudiced by this amendment. What is ‘readily apparent’ to one person may not be so to another. The number of cases in which SARS is likely to grant requests for corrections is likely to drop dramatically and a lack of consistency in interpretation between SARS’ assessors may be taken as a given.